North American Energy Partners Announces $127 Million Oil Sands Contract
August 31 2011 - 12:19PM
Marketwired
North American Energy Partners Inc. ("NAEP" or "the Company") (TSX:
NOA) (NYSE: NOA) today announced it has been awarded a $127 million
heavy civil construction contract with Fluor Canada Limited at
Syncrude Canada Ltd's (Syncrude) Base Mine and provided an update
on the progress of discussions with Canadian Natural Resources
Limited (Canadian Natural).
The new contract at Syncrude is the first of several large
construction contracts to be let relating to the mine train
relocations(1) at Syncrude's Base and Aurora Mines. NAEP completed
the preliminary earthworks related to this project in the spring of
2011. This new contract represents a significant increase in the
Company's work-scope on this site through to August 2012 and covers
the construction of roads, grading and civil works for the shear
key foundation at Syncrude's Base Mine. The foundation will provide
the base for construction of the second phase of the project, a
mechanically stabilized earth (MSE) wall and ore crushing facility,
construction of which is expected to be undertaken in the summer of
2012 under a separate contract yet to be awarded.
"We were very pleased to be the successful bidder on this
initial phase of Syncrude's mine train relocation," said Rod
Ruston, President and CEO of NAEP. "Not only does this add to an
already strong backlog of winter work for our fiscal 2012 year but
we believe that the opportunity to demonstrate our capabilities on
this initial project, coupled with our reputation as the preeminent
MSE wall constructor in the oil sands, strongly positions us to
secure additional work on Syncrude's mine train relocation
projects."
Canadian Natural Contract Discussions
The previously announced joint working committee, which was
formed to collect and analyze market data relating to cost
inflation in the Fort McMurray business environment, is expected to
make recommendations to NAEP and Canadian Natural in early to mid
September. At that time, NAEP and Canadian Natural will enter into
discussions to agree upon any index adjustments to be made and to
determine any additional contract amendments that the parties may
deem to be beneficial to the ongoing operation of the contract.
"Both parties are working to get this issue resolved as
expeditiously as possible," said Mr. Ruston. "Our goal is to
resolve the past issues and develop a sustainable solution that
ensures a continued strong working relationship for the remaining
four years of the contract. We are pleased with the progress to
date and both parties are eager to get the resolution behind us so
we can focus on the safe and efficient restart of operations at
Canadian Natural's site in January."
NAEP expects this process will be completed prior to the
anticipated restart of its overburden removal operations on the
site in January, 2012. NAEP will continue to recognize revenue on
the contract only to the extent of costs incurred until a formal
agreement has been reached and any contract amendments have been
executed by both parties. NAEP does not intend to disclose
information relating to the joint working committee
recommendations, however, NAEP will inform market participants of
any material contract adjustments upon final resolution.
Additional information on the contract negotiations and impacts
on NAEP's financial results can be found in the Company's
Management's Discussion and Analysis for the period ended June 30,
2011, which is available on SEDAR and EDGAR.
About the Company
North American Energy Partners Inc. (www.naepi.ca) is one of the
largest providers of heavy construction, mining, piling and
pipeline services in western Canada. For more than 50 years, NAEP
has provided services to large oil, natural gas and resource
companies, with a principal focus on the Canadian oil sands. The
Company maintains one of the largest independently owned equipment
fleets in the region.
Forward Looking Statements
The information provided in this release contains
forward-looking statements. Forward-looking statements include
statements preceded by, followed by or that include the words
"may", "could", "would", "should", "believe", "expect",
"anticipate", "plan", "estimate", "target", 'project", "intend",
"continue", "further" or similar expressions. Actual results could
differ materially from those contemplated by such forward-looking
statements as a result of any number of factors and uncertainties,
many of which are beyond our control. Important factors that could
cause actual results to differ materially from those in
forward-looking statements include success of business development
efforts, changes in oil and gas prices, availability of a skilled
labour force, internal controls, general economic conditions, terms
of our debt instruments, exchange rate fluctuations, weather
conditions, performance of our customers, access to equipment,
changes in laws and ability to execute transactions. Undue reliance
should not be placed upon forward-looking statements and we
undertake no obligation, other than those required by applicable
law, to update or revise those statements.
For more complete information about us you should read our
disclosure documents that we have filed with the SEC and the CSA.
You may obtain these documents for free by visiting EDGAR on the
SEC website at www.sec.gov or on the CSA website at
www.sedar.com.
(1) A "mine train" is a modular process for crushing and mixing
the oil sands with warm water to facilitate the extraction of
bitumen. The process includes three components: a crusher, which
breaks down the bitumen ore after it has been mined; a surge bin
that regulates the oil sands' feed into the process; and a mix box
in which warm water is added to the oil sands to form a slurry
suitable for pumping. The resulting slurry is then pumped to
extraction in a pipeline, which conditions the oil sands for
separation. In the oil sands, the mine train is relocated about
every 10 - 15 years as the ore is mined and the mine footprint
expands away from the upgrader.
Contacts: North American Energy Partners Inc. Kevin Rowand
Director, Investor Relations & Strategic Planning (780)
960-4531 (780) 960-7103 (FAX) krowand@nacg.ca www.naepi.ca
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